The Globe & Mail reports that independent boutique investment banking firms are taking aim at the corporate lending practices of Canadian banks and their affiliates. The compliant is that they say the need by corporate borrowers to access operating lines of credit is being used by banks to ensure that the banks and their subsidiaries get first dibs on the investment banking business of corporate clients. OSFI is reported as having expressed the view that, from a prudential stand point, banks should be as diversified as possible. Boutique investment bankers say that diversity is being exploited through tied selling practices that are pushing them out of contention for the most lucrative deals. Tied selling is regulated both under the Competition Act and the Bank Act. With increasing competition in financial services markets, and challenging financial conditions, we will likely see in the coming weeks if the complaints of boutique dealers are all bark or will come with bite. For the full article see "Bay Street's brewing war over corporate lending", Globe & Mail, March 1, 2016.
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